Financial Daily from THE HINDU group of publications
Tuesday, Oct 01, 2002
Financial Daily from THE HINDU group of publications Tuesday, Oct 01, 2002 |
|
|
|
|
|
Corporate
-
Announcements Andrew Yule may shed stake in Phoenix Yule Our Bureau
KOLKATA, Sept. 30 THE loss-ridden Andrew Yule & Co Ltd (AYL), a Government of India enterprise, in a bid to come out of the difficult financial situation, is planning to shed its entire 26 per cent stake in Phoenix Yule, a joint venture between the Belting Division of AYL and Phoenix AG of Germany. The German company holds the majority stake of 74 per cent. AYL has already initiated the due diligence process to shed its stake in profit-making group companies like Hooghly Printing Co Ltd (wholly owned subsidiary) and Tide Water Oil Co (India) Ltd (TWOL), an associate company, and expressions of interest (EoI) have already been received. AYL holds around 28 per cent in Tide Water, with FIs holding 14 per cent. Four Star Oil of US holds close to 22 per cent, with the balance is held by the public. Talking to newspersons here today after the company's annual general meeting, Mr Arindom Mulherjee, Managing Director of AYL, said this was part of the restructuring plan to make the operations viable within a specified timeframe. He said the process of stake sale in Hooghly Printing and Tide Water was expected to be completed by end March 2003, or even earlier. He said the entire process was being carried out as per the recommendations of the firm of consultants appointed by the board to carry out a detailed study on restructuring of operations, and to establish viability of the different divisions/units. Acute working capital shortage, increased overhead costs and lower margins have affected AYL's performance during 2001-02, which has continued to incur losses during the first five months of the current fiscal. Mr Mukherjee said some six EoIs have come in for Tide Water Oil and eight EoIs for Hooghly Printing. He said more details would be available only after finalisation of the valuations, shareholder agreements, etc. On the Engineering Division, he said the company was open to both strategic hive-off through the joint venture route and outright sale. He said the setback in the performance of the division was mainly owing to the acute working capital crisis experienced during the whole of 2001-02, even though the company started the year with an opening order book position of Rs 20 crore. AYL has carried out a reorganisation of operations by merger of the Kalyani and APC units. The Division manufactures industrial fans for specialised applications, mainly in steel, cement, thermal power stations etc. The profitability of the Electrical Division too has suffered on account of non-availability of required working capital because of blockage of funds with SEBs and Power Distribution Agencies. The Division has started the current financial year with an order book position of Rs 129 crore, and according to Mr Mukherjee, has been a front-runner in the niche market of rural electrification with specialised products like Sectionaliser and Auto-reclosures. Meanwhile, the shareholders today okayed the resolution permitting the board to issue up to 29,00,000 equity shares of Rs 10 each, out of the unissued share capital of the company for cash at par (for a total face value of Rs 2.9 crore) to the President of India without offering to any other existing shareholders. The Central Government has sanctioned and released to AYL by way of budgetary support, assistance of Rs 2.90 crore during 2001-02 for meeting capital expenditure towards implementation of certain plan schemes. As per the resolution, if the shares equivalent to the said amount cannot be issued to the Central Government, such amount would be converted into a loan by the Government, carrying interest at market rate. SEBI has cleared the proposed conversion of the financial assistance into equity shares in relaxation of Clause 13.1.1 of the SEBI (Disclosure & Investor Protection) Guidelines, 2000.
Send this article to Friends by
E-Mail
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|